Underdog Pick’em — a Daily Fantasy Sports platform — has pulled its paid contests from North Carolina and Mississippi. The reasons for the exit appear to be twofold. In North Carolina, Underdog is seeking an online sports betting license. In Mississippi, the nature of DFS contests is under fire. Mississippi isn’t alone in this outlook — more on that below.
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Underdog Preparing for North Carolina Sports Betting Launch
The Underdog story in North Carolina is a generally positive one. The company pulled its “Pick’em Classic” in the state, removing paid contests from North Carolina. The notice to customers said:
“Later this week, we will offer a free entry contest. You’ll have five free entries each day after its launch. You’ll build your entries like before, but now at no cost. If your entries hit, you’ll win withdrawable cash. you can still partake in our Drafts as usual. Thank you for all the support.”
This move comes ahead of the highly anticipated North Carolina sports betting launch. The market is expected to go live on March 11 (though pre-registration begins March 1). The North Carolina State Lottery Commission has granted supplier licenses, but there are no operator licenses approved as yet. Underdog is reportedly seeking a license to offer real-money sports betting in the state. If granted, the license would allow Underdog to offer full-fledged sports betting in North Carolina.
Mississippi Is a Different Story
Underdog will continue to offer its free draft contests in Mississippi, but it has pulled its paid contests in the state. However, there are no plans for Underdog to offer sports betting in Mississippi, as of this writing. The state just advanced its bill to legalize online betting, though it has had retail betting for a few years.
The Underdog exit from Mississippi is symptomatic of a wider issue with DFS operators in the US. States are cracking down on DFS harder than ever before.
Turmoil for DFS Operators in the US
Underdog isn’t the only company exiting states. It, along with PrizePicks, was ordered to pull away from the Arkansas market two weeks ago. The Arkansas Department of Finance and Administration classified both operators as “sports betting” providers due to the structure of their DFS games. The Arkansas DFA issued a cease and desist letter to both PrizePicks and Underdog for offering what are essentially player props.
Other states are taking notice as well, leaving DFS providers — especially those with similar structures to Underdog — on shaky ground.
Underdog Is Fighting Back
Recently, Underdog Fantasy founder and Co-CEO Jeremy Levine issued a letter to the Underdog Community expressing the company’s concerns. In it, he said:
“As you may have seen, the right to play our fantasy sports contests has recently come under attack. The attention is not organic – it’s being directly fueled by the companies with a virtual monopoly in sports gaming: FanDuel and DraftKings.”
He went on to say that DraftKings and FanDuel are using their lobbyists and vast resources to curb competition in the DFS space. Levine’s letter also lays out the standard rules that govern DFS contests, arguing that Underdog meets those requirements.
The outcome of this ongoing trend is yet to be seen, but Underdog and its contemporaries aren’t ready to take it lying down.
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